If Thomas has a 37 percent tax rate and a 10 percent after-tax rate of return, $59,000 of income in five years will cost him how much tax in today's dollars? Use Exhibit 3.1. (Round discount factor(s) to three decimal places.)

Multiple Choice

• $59,000

• $21,830

• $38,047

• $13,556

• None of the choices are correct.

EXHIBIT 3-1 Present Value of a Single Payment at Various Annual Rates of Return

	4%	5%	6%	7%	8%	9%	10%	11%	12%
Year 1	.962	.952	.943	.935	.926	.917	.909	.901	.893
Year 2	.925	.907	.890	.873	.857	.842	.826	.812	.797
Year 3	.889	.864	.840	.816	.794	.772	.751	.731	.712
Year 4	.855	.823	.792	.763	.735	.708	.683	.659	.636
Year 5	.822	.784	.747	.713	.681	.650	.621	.593	.567
Year 6	.790	.746	.705	.666	.630	.596	.564	.535	.507
Year 7	.760	.711	.665	.623	.583	.547	.513	.482	.452
Year 8	.731	.677	.627	.582	.540	.502	.467	.434	.404
Year 9	.703	.645	.592	.544	.500	.460	.424	.391	.361
Year 10	.676	.614	.558	.508	.463	.422	.386	.352	.322
Year 11	.650	.585	.527	.475	.429	.388	.350	.317	.287
Year 12	.625	.557	.497	.444	.397	.356	.319	.286	.257
Year 13	.601	.530	.469	.415	.368	.326	.290	.258	.229
Year 14	.577	.505	.442	.388	.340	.299	.263	.232	.205
Year 15	.555	.481	.417	.362	.315	.275	.239	.209	.183